All Forum Posts by: Ryan Pyle

@Mark Robertson, it really depends on the area. If they are getting $260 in rent right now I'm guessing it's in a pretty rough part of town. Those properties always trade with a huge risk premium built in, meaning that even though a property may be worth $xx @ a 7 cap and the rest of Toledo is trading at a 7 cap, properties in rougher areas seem to have a ceiling of about $25k per unit, no matter what the cash flow looks like. 

Feel free to PM me with more specifics. I can give you my two cents.

@Engelo Rumora I saw that post. I've yet to encounter BAT, but I have no doubt I will at some point. A couple years ago the city went out and mowed every vacant lot in the city whether they needed mowing or not and then sent us all bills. My lots did not need mowing as we maintain them. The bill for mowing one double lot was $1400. I went down to the city to fight it (along with recent pics of the mowed lot taken by my tenant who lives next to the lot and uses it as his yard). It turns out that a rogue employee put that program together and ALL of the bills were cancelled. Maybe this is the same thing? Hopefully so.

@Engelo Rumora, I wonder if @Ben Leybovich realizes that he is from Lima and admits it in his profile...and he's picking on Toledo! Ha ha ha ha ha! That's like a maggot and a slug arguing over which one of them is better looking. 

@Rob Gillespie Ben's point, and I agree with him from lots of experience, is that no amount of management can insulate you from things you can't control. You can not stop time. Older houses deteriorate and as they do so they require more and more maintenance and upkeep. In Toledo older neighborhoods get way lower rents, which means a much higher percentage of your revenue has to go back into the house in the form of repairs. Repairs do not add value. They at best maintain value. In my apartment buildings I spend about the same amount on repairs as a percentage of my revenue as I do on the houses, but a large chunk of that goes to upgrades that add value to the property. 

Repairs are a pain in the butt. I am at about 180 units, and I can tell you most of my time is spent as a dispatcher sending maintenance people to go and repair my pigs.

@Ben Leybovich I agree completely and am experiencing the same thing here in Toledo. I have 36 SFR's, 35 of which are pigs. That's down from 40. I just sold a pig last week for $700...I had $37k into it. I couldn't keep the scrappers out of it when it was vacant. I view my pigs as liabilities, not assets. They are all ticking time bombs.

I am also dealing with flooded basements. However I will caution you that apartments flood too. And it can be worse because basement apartments are occupied units, unlike your unfinished basement in the pictures. When they flood you not only have to remediate the problem but you also have to put the tenants up in a hotel. I had a main sewer line back up into an apartment on Christmas day this past year. Not fun. But, I will still take apartments over houses any day. I love my apartments, hate my houses.  

Run...that's not fast enough! Run away as fast as you can!!! That's a terrible area.

I own a 1 bedroom house and love it. Very similar numbers to yours. I own about 80 1 bedroom apartments and love them as well. Small space = small turnover costs. Also I usually get very long term tenants in these types of units as they tend to be older and just looking for a nice simple place to call home. I would shy away from younger transient types.

Glenn Brooks, 419-841-7488

I will try to make it. BTW Ben, I checked out Loopnet (for the first time in years, never good Toledo deals there, that's where everyones' junk gets posted), the three larger complexes you saw all went for sale on Auction.com today. They were owned by a guy from out of state and had iffy occupancy (high 80%'s which is low for Toledo right now) and were in areas transitioning from OK to slightly less than OK. Looked like they sold for some big #'s. I will be interested to see who bought them. 

@Jim Zatko- I have a few points:

1. Per what Andrew Fidler said above, I have bought houses in flood zones before and had them removed from the flood zones by an engineer. PM me and I will give you the contact info of the guy that did it for me. It cost me $750 but it was well worth it. He will tell you up front if he thinks he can get it removed.

2. I have lived your lesson many times. Every time I've flipped a house and not taken the first offer, I've sold it for less then the first offer every time. I always take the first reasonable offer.

3. My first flip was also a flop. It was in July 2004. I still own it today and I lose about $1,000/mo on it every month. I call it my monthly tuition. But that is an extreme example.

4. I'm guessing your property is in Washington Local. If I were you I would try to get the flood ins removed and continue trying to sell it. WLS is hot and we are not quite into the main selling season just yet. Be patient.

Good luck!